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Eisai doubling its Indian API to ride Japan's generic wave

Active ingredient production facility at Eisai India plant--Courtesy of Eisai

Japan's government is looking to procure more generic drugs to help relieve its healthcare budget, and Eisai intends to cash in on that shift by offering its own India-made APIs to competitors. It is doubling its API production to have the extra product for sale in Japan.

Eisai will invest tens of millions of dollars to expand production at a plant in Andhra Pradesh to 60 tons a year from the current 30, the Nikkei Asian Review reports. The new lines are slated to be online at the end of 2017.

Eisai will produce APIs for about 10 products, including ingredients for drugs to treat high cholesterol and allergies. According to Nikkei, Japanese API makers currently hold 30% to 40% of the market, European producers about 20% with the rest split among low-cost suppliers from South Korea, China and India.

Eisai figures the strength of its brand and the low cost of its Indian manufacturing operations will give it an edge in the market. It expects to generate billions of yen a year in sales by 2020, which it intends to invest in its development programs in oncology and dementia, Nikkei reports.

Eisai has had a rough 5 years since the patent loss of its top seller, the Alzheimer's remedy Aricept. It has cut costs, laying off people in the U.S. and elsewhere and slowly regaining its financial footing. Earlier this week, it offered up a new financial forecast for the fiscal year ending March 31, saying it expected its operating profit to be nearly 11% higher than its previous projection, reaching 51 billion yen ($433 million).

As part of its cost-cutting, last year Eisai transferred to Biogen ($BIIB) the lease on its portion of a plant in Research Triangle Park the two had shared since 2012, letting go about 135 workers in the process.